I'm a deputy editor at Forbes, where I cover venture capital and startups and produce Forbes' annual Midas List. Since joining Forbes, I've helped send a bad guy to jail, picked the world’s most powerful people, covered a dispute between a drug company and its unwitting trial subjects, interviewed Dean Kamen and Geoff Canada, persuaded Hugh Hefner, Karl Rove, and Angela Merkel to work with me, and shared a Po-Boy with the world’s biggest tree-cutter. My journalism career began the day I saw my first pitch (ever) land on the front page of Sunday’s Post. I earned my bachelors from Princeton, my masters from Stanford and had a short (but hopefully forgivable) stint as a consultant in between. You can catch my Twitter missives @nicoleperlroth.

Non-Profit CouchSurfing Raises Millions In Funding

In the latest indication Silicon Valley is in the midst of a new technology bubble, CouchSurfing.org, a non-profit website that connects global travelers with locals, has opted to accept $7.6 million in funding from Benchmark Capital and Omidyar Network. In conjunction with the funding, CouchSurfing will convert from its non-profit status to that of a B Corporation. (The B stands for “benefit.”) Benefit Corporations are for-profit businesses that define themselves as socially responsible to investors and consumers.

“The non-profit structure is not ideal in enabling innovation to occur in terms of regulatory oversight and various auditing requirements,” says Daniel Hoffer, CouchSurfing’s co-founder turned President and CEO. “B Corporation status allows us to take investment money and be nimble and flexible while sticking with our social mission.”

It will also allow the start-up to begin profiting off its three million large member base. Until now, CouchSurfing’s only revenue stream was its paid identification verification service which charges members a tiny fee to prove they are who they say they are. Hoffer insists CouchSurfing will continue to make its service free to users and is currently exploring alternative revenue streams. The first order of business, Hoffer says, will be “aggressive hiring” especially at the technical level. Until now, CouchSurfing has bootstrapped its 30-employee organization with the help of thousands of passionate volunteers who set up CouchSurfing “meet-ups” around the globe.

The news is timed one month after another couch surfing website, Tripping.com, announced it had secured over a million in seed funding from Quest Venture Partners and a group of undisclosed angel investors. Tripping.com only claims “thousands” of members and one has to wonder whether CouchSurfing developed a sudden inferiority complex upon hearing news that its smaller, new, for-profit rival was suddenly flush with cash.

Regardless of the reasons for the investment, venture capitalists are thrilled the organization has accepted their money: “CouchSurfing is the leader in doing what it does,” says Matt Cohler, who led the investment for Benchmark and will take a board seat in conjunction with the funding. “Nobody else in the world has such a strong vibrant community and such a deeply engaged active network of people.”

CouchSurfing boasts a surprisingly large user base of three million people in 81,000 cities. Some 5.6 million connections have taken place on the site– whether that’s people sharing a couch, a coffee, or simply local knowledge of the best bars, restaurants and sight-seeing spots with other diehard CouchSurfers. The organization recently learned that a Mongolian livestock farmer has hosted over 100 CouchSurfers in his yurt in the capital of Mongolia.

“I don’t know even how he has internet access,” says Hoffer. “But they’ve cooked dinner together. Westerners have learned what it’s like to live in a yurt and tend livestock and the farmer has learned more about Westerners.”

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

I’ve been a member of both Couchsurfing and Tripping for a year or so. Considering that Couchsurfing blatantly ripped off Tripping’s design and passed it off as their own, I’d say you’re right on the money with this quote –

“The news is timed one month after another couch surfing website, Tripping.com, announced it had secured over a million in seed funding from Quest Venture Partners and a group of undisclosed angel investors. Tripping.com only claims “thousands” of members and one has to wonder whether CouchSurfing developed a sudden inferiority complex upon hearing news that its smaller, new, for-profit rival was suddenly flush with cash.”

As an overall concept, Couchsurfing was certainly not the first hospitality site. One of the first official organizations was Servas which was founded in 1949….30 years before the Couchsurfing founders were even born!

I was just talking about the site design. If you look at both sites side by side, you’ll see that Couchsurfing copied Tripping’s homepage design even down to the button color and font. And if you open the links I posted above, you’ll see that Couchsurfing is just a “copy-cat” of Servas and HospitalityClub.

Design stuff aside, I’ve become a fan of Couchsurfing and Tripping. I’m on both sites and I’m convinced that this is how people will travel in the future. So who cares if they both use orange? They make it easy to meet people around the world and that’s what really counts.

After digesting this shocking news for a little while today, I just published a message to the hospitality exchange community. Most important: Hospitality Club will never be a for-profit business, we are currently developing a new open-source website and some behind-the-scenes info on CS. Please read the statement here: http://volunteerwiki.hospitalityclub.org/couchsurfing-for-profit-business-now

Your post is fine!! The news itself is. Having brought this entire idea of a social hospitality network into the world and knowing of the history of hospitality exchange that goes back much further (Servas+Bob Luitweiler 60 years ago) it feels like a punch in the stomach now seeing this turn into a business. And watching those 5 videos they posted online, just made it even worse.

Of course I am highly biased, but the response from the community has been awesome today, I know that many members feel like this. Now we just have to get our act together and improve HC so we can actually with a straight face compete with CS. Non-profit hospitality exchange will live on when CS is long gone. I hope ;-)

Thanks for your comments! Does Couchsurfing’s status as a B Corp. or the fact that it won’t charge users make any difference? How does their transition to a for-profit impact the community? Do you think this will impact their volunteer base? Have you seen any changes to Tripping’s volunteer base since they accepted seed funding last month?

Tripping has a volunteer base?? :-) I know they are active in comments here, but I don’t think they actually have anyone using their site.

“B” Corp doesn’t mean anything to the international community, it’s clearly just PR – maybe it will impress some people in the States, for the rest of us it’s clear that CS will now be about making money. And yes, this will have big effects on the community and the volunteer base.

Why do you think CS changed their domain from couchsurfing.com to .org a few years ago? Are they going to change back to .com now? :-) Lots of us are very idealistic. We host because we believe we are helping someone, we volunteer because we believe we’re building a better world. If CS had been a money-making business from the beginning, they would never even have taken off. I warned of this quite early when they started their verification scam, but many people followed Casey blindly because the website was oh so nice and flashy.

Oh well, we’ll see how this pans out – after airing out a bit today we’ll now concentrate on actually making HC better and then probably witness a CS-PR-storm…Casey now traveling to 6! cities (wow!!) is the first sign of things coming.